By Darren Dolcemascolo, senior partner and co-founder, EMS Consulting Group
In this and the next edition of Thinking Lean, we address value stream mapping, which is a high-level, strategic methodology for developing an improvement plan for a product or service line. The value stream mapping methodology was introduced by Mike Rother and John Shook in their classic workbook Learning to See, originally published in 1998. Value stream mapping is used to identify and then work toward a future state following the plan-do-check-act (PDCA) methodology introduced in my last article. Value stream mapping can be used in the medical device world for analyzing and improving order fulfillment, product development, and even support processes.
A value stream is defined as all of the activities needed to deliver a service or product to a customer. In general, it begins with a customer order and ends with delivery of the order or payment collection after the order has been delivered — it is the entire cycle. For a typical medical device company, this cycle includes purchasing activities, planning or scheduling activities, production activities, material movement activities, and many others. The purpose of looking at the entire flow, from customer order through to delivery (or payment), is to understand where the breakthrough opportunities are. Through the value stream mapping process, we identify and then plan to implement these breakthrough opportunities.
The value stream mapping process involves the following activities:
In this article, we will discuss the first two steps.
Step 1 — Identify The Scope And Team
First, organizations must identify their value streams. I recommend beginning with value streams that touch the end customer. For a medical device company, these are the fulfillment activities for product lines themselves. Each product line or product family might be considered a value stream. If it is difficult to break up products into families, consider creating a matrix that shows products (or part numbers) versus the processes or operations that they utilize, as we see in the figure below. A rule of thumb is that if a set of part numbers or products has 70 percent or more commonality in operations/processing, it can be considered a value stream.
After identifying our value streams, we must select which value stream we would like to improve first. A very visible, high-growth, and/or high-volume value stream would make the most sense.
Once we have determined which value stream to map, we must identify the team to work on this activity. The team should be made up of managers with decision-making authority. While it is important to include front-line workers in a kaizen event (in which a more detailed process knowledge is needed), for a value stream activity we need to make more strategic decisions about the overall flow of work in the future. The team make-up should cover the entire flow of work. For mapping a product line, this would include purchasing, sales, operations/manufacturing department managers, finance, and distribution.
Step 2 — Map The Current State
The current state is a snapshot of the activities needed to deliver the product or service. After we’ve selected a product line to map, we must identify the customer requirements for the product line. This would include things like lead time/delivery time to the customer, average volume demanded, and quality requirements. A customer icon, pictured below, will be in the upper right hand side of a map when mapping a door-to-door value stream.
Next, we identify the main processes. Eventually, we will create a process box for each process. A process box in a value stream is an area of material flow in which there are no significant delays or inventory. Wherever there is a delay, there would be a new process box. For example, if we have two assembly processes and a small amount of inventory between them, each would be a separate processing box. If, on the other hand, we had two people doing assembly utilizing continuous flow in a cell, the cell would be only one process box, as there would not be any significant delay or inventory between the two steps.
After we identify the processes, we must identify the metrics to be collected. At a minimum, we should include:
Other metrics to include, as needed, would be:
The next step is to create and layout each process box with data below it. In most cases, we are creating this on the wall of a conference room. If this is the case, consider using large sticky notes to depict each process box with data.
The last step to create a current-state map is to connect the boxes and to calculate the total lead time versus the value-creating time. To connect the process boxes, we must find out how they are related. Is there a relationship or defined agreement between the production processes, or do we have a push system in which each process works off its own schedule? To calculate total lead time, we add up the lead times of all of the processes, and to calculate the total value-creating time, we need to add up all of the processing times for each step.
Example: “ACME Med Devices”
Let us now consider an example and walk through the steps. Imagine a company that manufactures medical diagnostic equipment — we’ll call it ACME Med Devices. It purchases many components, has some in-house fabrication, and assembles and tests its product. Let us imagine that for one of its value streams, it has categorized its product into three categories: A, B, and C. While each of these product categories go through the same processing steps, each one takes a different amount of time. A items are the simplest, B take more time to manufacture, and C items are the most complex of the three.
Beginning in the upper right hand side, we have our customer icon. Since this value stream services many customers, we use one general icon for customers. In some cases, a value stream would service only one or two customers. In such cases, we would have specific customer names. Next, we move backwards along the material flow on the bottom of the map with the following process boxes:
The figure below shows what we would have drawn up to this point.
For the information flow, we begin with daily orders arriving from the customer and going to Acme’s production control. Next, we connect Acme to its suppliers, showing orders driven by material requirements planning (MRP) and forecasts going from production control to the suppliers. Then, we connect production control to manufacturing, showing a daily schedule that is sent to metal stamping, assembly, and test. Also, a daily shipping schedule is sent to shipping.
Now that we understand how each manufacturing process knows what to make, we can determine how each is connected. How is metal stamping connected to assembly? Is there a defined relationship? Since each area works off its own schedule, there is no defined relationship. Thus, we have a push system. We would draw in push arrows between metal stamping and assembly, between assembly and test, and between test and shipping.
We then draw in our timeline and summary metrics. The top portion of the timeline will show lead time, estimated by days of inventory, while the bottom portion of the timeline will show value-creating time — time in which the product is being transformed.
Finally, we sum up the lead time and value-creating time. For lead time, we have 50 days for A, 58 days for B, and 43 days for C. Value-creating time is 4 minutes, 7 seconds for A; 7 minutes, 7 seconds for B; and 23 minutes, 7 seconds for C. This large gap between value-creating time and lead time is typical. Below is our finished current-state map.
In the next article, we will talk about the steps to creating a future-state map and planning implementation.